The designations are mandated by state law and determine a variety of state funding opportunities to assist in economic development.

The rankings are based on a statutory formula outlined in the 2006 Tax Credits for Growing Businesses and the Department of Commerce assembles required statistics for each of North Carolina's 100 counties. The counties are applied and assigned a tier designation ranking from one to three.

According to the NC Dept. of Commerce, Tier 1 counties are the most economically distressed and Tier 3 counties are the least. Eligible businesses that locate in lower-tiered counties are eligible for some grant programs and larger tax credits than those that are located in higher-ranked areas.

Twelve counties will change tier designations for 2013. Gates, Hoke, Jackson and Wilson counties will shift from a Tier 2 to a Tier 1 ranking. Beaufort, Cleveland, Greene and Surry counties will move from Tier 1 to Tier 2 counties. Guilford and Lincoln counties, currently Tier 3 counties, will shift to a Tier 2 ranking. Franklin and Haywood counties will move from a Tier 2 to a Tier 3 ranking.

The law calls for the 40 most distressed counties to become Tier 1 counties, the next 40 counties to be designated as Tier 2 and the 20 most prosperous counties to become Tier 3 counties.

The rankings are based on an assessment of each county's unemployment rate, median household income, population growth, and assessed property value per capita. In addition, any county with a population of less than 12,000 or a county with a population of fewer than 50,000 residents with 19 percent or more of those people living below the federal poverty level automatically are designated as among the most distressed counties.

Potential benefits to companies under each tier designation include:

Tier 1 - $12,500 tax credit per new job with a requirement to create at least five jobs, and a 7 percent tax credit for eligible business property expenditures. Tier 2 - $5,000 tax credit per new job with a requirement to create at least 10 jobs, and a 5 percent tax credit for eligible business property expenditures of more than $1 million. Tier 3 - $750 tax credit per new job with a requirement to create at least 15 jobs, and a 3.5 percent tax credit for eligible business property expenditures of more than $2 million.